We have recently been involved in the sale of three properties which were considered to be possibly ripe for development but where no planning consent had been obtained.
In each case we were able to sell unconditionally albeit with deferred completion periods and this had the benefit to the clients of the firm knowledge that the sale would be concluded.
The normal way of dealing with development sites is to enter into a conditional contract for sale with a developer. The developer wants to pay nothing for what is effectively an option and advances the argument that there is a payment by them in the cost of making the planning application.
The customary period allowed for a conditional contract is 18 months which creates time for the developer to make a planning application and if necessary to lodge an Appeal if a refusal is received or the planning outcome is not deemed to be satisfactory.
Developers will normally pay in excess of open market value by anything up to 40% to 50% as the development value of the land is often far greater than the value of the property presently occupying the site. Traditionally developers normally try and obtain more than one property to create a more comprehensive site.
The contract offered by a developer is often one sided and requires careful negotiation by both surveyor and solicitor to ensure it is workable for the potential vendors.
